Tax from firms KD 1b

06/10/2015

KUWAIT CITY, Oct 5, (KUNA): Finance Undersecretary Khalifa Hamadah said taxes levied by the State from companies operating in the country ranges between KD 800 million and KD one billion annually, according to the new taxes law.

The Ministry will be handed the new taxes draft law from the International Monetary Fund (IMF) by next December, and will be reviewing it during three to four months, the minister said in an interview published by the daily newspaper, Al-Jareeda, on Monday.

All concerned local authorities will take part in examining the draft, he said, naming Kuwait Chamber of Commerce and Industry, Kuwait Banking Association, Union of Investment Companies (UIC), beside others.

The meetings held between the Ministry and the IMF resulted in a conclusion that it would be senseless to impose taxes on individuals while collecting annual taxes of 10 percent, after it was 15 percent, on companies operating in the country, while the percentage could be adjusted according to the country’s interests.

The issue of borrowing to tackle the budget deficit “is not determined yet, “ he said, noting that the Ministry had discussed with both the Public Institution for Social Security (PIFSS) and Kuwait Petroleum Corporation (KPC) their capability in issuing annual bonds at the value of three to KD 4 billion.

The Ministry is awaiting the response from PIFSS and KPC during the current week, he said. This is considered the “first borrowing stage, while the second stage is not determined yet, cost wise neither time wise, as the picture will be clear by the end of October,” he added.

The Ministry signed a contract two months ago with Ernst Young (EY) multinational professional services firm, in order to prepare a study about rationalization of subsidies, to be ready before next November.

The current income taxes law was approved in 2008. It was later modified, particularly with respect of foreign companies operating in Kuwait. One of the amendments included abandoning progressive taxes that ranged between five and 55 percent and uniting the fees at 15 percent to all companies.